Adani Enterprises cancels demerger of stake in Adani Wilmar till it meets public float rules

Mumbai: The board of Adani Enterprises on Tuesday withdrew its earlier decision to spin off the shareholding of the group’s fast-moving consumer goods (FMCG) unit Adani Wilmar (AWL) and transferring the stake to its shareholders.

Adani Wilmar, which has 87.9% promoter shareholding, first needs to meet its minimum public shareholding (MPS) requirement, the company said. India’s markets regulator Securities and Exchange Board of India (Sebi) requires all listed companies to maintain a minimum public shareholding of 25%.

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“During the period in which AWL is implementing the MPS strategy in accordance with the relevant SEBI Circulars, in order to offer directional clarity to shareholders, the draft Scheme is hereby withdrawn,” the company informed the bourses in a filing on Tuesday evening.

Adani Enterprises holds a 43.94% stake in Adani Wilmar through Adani Commodities LLP, a holding company. Singapore's Wilmar International owns 43.94% in the company through Lence Pte Ltd.

August announcement

Adani Enterprises had announced in August that it would demerge its stake in Adani Wilmar, ending its joint venture with Wilmar International. Shareholders would receive 251 shares of Adani Wilmar for every 500 held in Adani Enterprises.

Adani Wilmar sells cooking oil under the Fortune brand, among other products.

Shares of Adani Wilmar gained 3.33% on Tuesday to close at ₹335.3. Adani Enterprises gained 1.46%, ending the session at ₹2,841.45. Sensex was 0.45% in the green. The announcement was made during trading hours.

Adani Enterprises’ board on Tuesday also approved the company to raise ₹2,000 crore through the issue of non-convertible debentures (NCD).

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In the July-September quarter, Adani Enterprises’ profit surged more than six times compared to the same period last year on the back of higher contributions from its upcoming businesses.

The Adani Group flagship firm reported a consolidated profit of ₹1,747 crore compared with ₹228 crore in the year ago period. The consolidated top line grew 15% year-on-year to ₹23,196 crore.

Earnings before interest, tax, depreciation and amortization (Ebitda) at ₹4,354 crore for the quarter were 46% higher than the same period last year.

Record profit

For the first half of the fiscal year, the company reported a record profit of ₹8,654 crore. The Ebitda from the company’s emerging businesses grew 85% year-on-year during the first half and accounted for 60% of its consolidated Ebitda.

“Adani Enterprises Ltd (AEL) continues to focus on investing in logistics, energy transition and adjacent sectors that are core to the economic growth of the country. This record-breaking half-year performance has been led by Adani New Industries Ltd (ANIL) and Adani Airport Holdings Ltd (AAHL) with their rapid growth in capacity additions and asset utilisation,” said Gautam Adani, chairman of the Adani Group.

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The incubator firm for Adani Group’s new businesses houses four upcoming businesses, including Adani New Industries Ltd, with its green hydrogen ecosystem, data centres, airports and roads.

“Our focus on execution of greenfield projects in ANIL across three giga scale integrated manufacturing plants and the accelerated development of Navi Mumbai International Airport are driving these robust results,” Adani said. “Further, AEL is poised to repeat this turbo growth across data centres, roads, metals & materials and specialized manufacturing. AEL continues to invest in innovative technology across its platforms to support this high growth phase.”

While the new businesses made an outsized contribution to the consolidated Ebitda, the contribution to profit was relatively lower at ₹621 of profit before taxes from new businesses versus ₹909 crore from established businesses. The latter include mining services, mining, coal trading and trading in other metals and industrials.

In the red

The airports business, in fact, continued to be in the red, and reported a pre-tax loss of ₹148 crore. Adani operates airports in Mumbai, Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvanathapuram.

ANIL reported a 74% year-on-year growth in profits before tax at ₹916 crore.

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During the second fiscal quarter, Adani Enterprises raised ₹4,200 crore through a qualified institutional placement and ₹800 crore through a public issuance of NCDs. The latter was a rare issuance of public NCDs by a corporate entity.

The company had a gross debt of ₹63,855 crore as of 30 September. Of this, ₹16,647 crore was owed to the company’s promoters while the rest was external debt. That translated to a net debt to Ebitda ratio of 2.5 compared to 2.3 as of 31 March.